Kindly provide me the soln for the below query e.g Plant purchased Rs. 100/- vat charged @12.5%. Under MVAT we can claim input vat in excess of 3%.Hence out of 12.5Rs paid to Govt we can claim Rs. 9.5/- as input against our vat liability.
But what about Rs.3/- which is retained ? Should it be capitalised or shud be charged to P & L?